So, here’s a scenario, tell me if any of it sounds familiar (names have been changed to protect the guilty).

Clyde sees Craig providing really great customer service (obviously this scenario isn’t happening in a bank). It’s not the first time Clyde has seen Craig do this. Bizarrely, it happens all the time. What can we say, Craig’s a helluva guy.

So, Clyde logs onto the intranet and nominates Craig for a Service Heroes award. Nice going Craig. If, and it’s quite a big if, Craig wins, he gets to go on an incentive trip to Mauritius. Over the next few months they gather a bunch of nominations and in October a panel sit together and review all of them. And they’re pretty much what you’d expect – a line-up of the best and brightest employees shooting the lights out, going the extra mile, providing service excellence and a host of other boring clichés (I’m not making this shit up, I’ve read these nominations).

In November, Craig bags the prize and off he goes. It’s blue skies, golden beaches, overpriced cocktails and failed recognition programmes all the way, and here’s the five reasons why.

  1. Programmes like this ‘skim the cream’ and reward the people already giving good service. They fail to shift the dial for the vast majority of people middling along – but that’s what you want. You want to bring everyone along on the ride. Basically, they get what they already got and they pay a lot for it.
  2. The people offering the worst service know they’ll never crack the nod and so it does nothing to elevate your service bottom feeders – the people who most need it.
  3. Too few people are rewarded which disincentivises the majority. Almost everyone goes ‘meh, what are the chances?’
  4. There’s a massive lag between behaviour and reward. Between the action and the incentive months can go by – months where even the best employees feel unrecognized for their efforts.
  5. It shifts the emphasis from recognition to reward and in doing this from abundance to scarcity.

If you want to drive better strategic alignment across a team or organisation, your reward and recognition programme is an excellent lever. Here are some strategic principles to consider that’ll ensure you get the most from it:

We use the 50/30/20 rule of recognition. 50% of your efforts should go towards peer-to-peer recognition. Allowing colleagues to acknowledge and recognise each other’s efforts plays a significant role in creating a culture of appreciation.

41% of companies that use peer-to-peer recognition have seen marked positive increases in customer satisfaction. (SHRM/Globoforce Employee Recognition Survey, 2012)

The same survey also showed that peer-to-peer recognition is 35.7% more likely to have a positive impact on financial results than manager-only recognition.

30% of your time, effort and budget should go towards manager-driven reward and recognition. And only 20% of your resources should be business driven.

In addition to that:

  • The recognition should occur as close to the performance of the actions as possible, so the recognition reinforces the behaviour you want to encourage.
  • Tiered reward and recognition programmes that include formal, informal, non-financial and financial rewards allow for flexibility and different reward options suitable to different situations.
  • Public reward and recognition increase the value of the reward. It’s just much better to score a hole-in-one when it’s in front of a crowd than when you’re on your own.
  • Recognition works – it’s not the financial reward but the feeling of being acknowledged that drives behaviour. Rather have fewer rewards (a lower reward value) and more rewarded people. Praise and commendation from managers was rated the top motivator for performance, beating out other noncash and financial incentives, by a majority of workers (67%) (McKinsey Motivating People, Getting Beyond Money, 2009)

If we boil things down to sticks and carrots and we acknowledge the truth that sticks don’t work (not to mention the grey legal area they leave us in), we’re left with carrots. We need to ensure that we use those carrots to effectively engage everyone in the organisation because sending Craig and a handful of his mates to Mauritius next year is going to leave the other 99% of the organisation, the 99% that we really need to engage, out in the cold with your customers for company.

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